Noah Smith has entered the debate:
So the fundamental reason your health care costs so much is not that the health insurance companies are lining their pockets. And it’s not that insurers are an inefficient mess. It’s that the actual provision of America’s health care itself just costs way too much in the first place.
The actual people charging you an arm and a leg for your care, and putting you at risk of medical bankruptcy, are the providers themselves. The smiling doctor who writes you prescriptions and sends you to the MRI and refers you to a specialist without ever asking you for money knows full well that you’re going to end up having to wrangle with the insurance company for the cost of all those services. The gentle nurse who sets up your IV doesn’t tell you whether each dose of drugs through the IV could set you back hundreds of dollars, but they know. When the polite administrative assistants at the front desk send you back to treatment without telling you that their services are out of your network, it’s because they didn’t bother to check. The executives making millions at “nonprofit” hospitals, and the shareholders making billions on the profits of companies that supply and contract with those hospitals, are people you never see and probably don’t even think about.
Excessive prices charged by health care providers are overwhelmingly the reason why Americans’ health care costs so cripplingly much. But they’ve outsourced the actual collection of those fees to insurance companies, so that your experience in the medical system feels smooth and friendly and comfortable. The insurance companies are simply hired to play the bad guy — and they’re paid a relatively modest fee for that service. So you get to hate UnitedHealthcare and Cigna, while the real people taking away your life’s savings and putting you at risk of bankruptcy get to play Mother Theresa.
So the way to make our health care system affordable is not to browbeat insurers, in the hope that they will be able to reduce their profits and pay for us to have cheap health care. Insurance companies simply do not have the power to do that, even if you threaten to shoot them. What we need is to reduce costs within the actual medical system itself...
He jumps in to the comments to add:
They [providers] don't know the exact costs, but they have a general idea, they know the costs are very high, and they typically don't talk to patients about those costs when prescribing services to them. This is understandable, given that talking about costs would make patients less comfortable while receiving care, and one of doctors' main jobs is to make patients feel comfortable. But there's basically no point in the process of receiving care at which patients could make a decision based on cost.
Incentives matter, and patients aren't automata who are unable to follow incentives, as much as some doctors would like them to be. They can understand pricing concerns/risk, and they're coming from a wide variety of financial situations. A recent NYT op-ed admits as much:
One of my first lessons as a new attending physician in a hospital serving a working-class community was in insurance. I saw my colleagues prescribing suboptimal drugs and thought they weren’t practicing evidence-based medicine. In reality, they were doing something better — practicing patient-based medicine. When people said they couldn’t afford a medication that their insurance didn’t cover, they would prescribe an alternative, even if it wasn’t the best available option.
As a young doctor, I struggled with this. Studies show this drug is the most effective treatment, I would say. Of course, the insurer will cover it. My more seasoned colleague gently chided me that if I practiced this way, then my patients wouldn’t fill their prescriptions at all. And he was right.
Of course, the op-ed is doctor-apologia, working as hard as possible to finger point at insurance companies and only admitting a possible problem of lacking clear and reasonable pricing when it comes to drugs; after all, patients and their insurance companies pay pharmacists and drug companies for drugs, not doctors. They can't see that there could be a similar problem for their own services (insert Upton Sinclair quote). But they admit that patients can and do make decisions based on their understanding of prices and risk. Yet, when it comes to their own services, this is absurd to them. Surely they know better than the patient, and the patient should just do what they say; cost doesn't matter.
But as Noah points out, they "know", but they don't know. They "don't bother to check". They give every excuse imaginable to avoid the topic. And some of this is understandable! As Noah points out, they just want to focus on the medicine; they want to make the patient feel comfortable with the medicine; medicine is sacred and money is profane, so never the two shall meet. Doctors don't want to know. They're happy to sit back and say that they're prohibited by law to consider their costs in providing recommendations, but conveniently forget to be patient-based, not remembering that patients can and do make such decisions. But patients can only do this in a reasonable way when they're properly informed before making decisions. Without information, it's generally fear that rules the day, be it fear of medical issues or fear of medical expenses. Some doctors want to not know so much that they can't even identify the names of the relevant numbers in the billing/insurance process that might be involved in the decision-making process. This is perfectly fine, of course; they shouldn't have to spend all their time becoming intimately familiar with the details of how each of their patients' insurance works.
It's hard for me to come to any conclusion other than that providers shouldn't be bothered to know those details. Instead, there is an extremely simple solution that takes one small step toward what Noah wants - providers just need to inform patients of what they know about the pricing for suggested courses of actions before those courses of action are taken. We need to create a point in time where patients can have the relevant information with which to make a decision that takes their own understanding of their own finances into account. I have suggested that providers simply provide the price that they will be billing insurance and their negotiated rate. The negotiated rate gives the patient a good idea of what to expect if the procedure is covered. Sure, the provider doesn't know the rest of the details of the insurance policy (deductibles, co-insurance, out-of-pocket max, etc.), which are important for estimating things like out-of-pocket costs - again, they shouldn't. But the patient can know these things. The only information the patient is missing is the information that the providers refuse to give them. In addition to the negotiated rate, it would be nice to have the full bill amount, so the patient can consider the risk of an insurance denial (and perhaps have a conversation about this risk or gather more information). Then, they at least have some idea of how much they could be nominally on the hook for if there is an insurance snafu.
I am generally anti-regulation, but the good doctors here at TheMotte have convinced me that there is no way that we are going to persuade them on this point with reason, so I am reluctantly throwing in my support for as minimally-scoped regulation as we can come up with, just as much as it takes to cast off the excuses and actually get numbers in front of patients at a point in time where they can use those numbers to make decisions. Hopefully, someone can get this idea to people like Noah, so they can consider advocating for something like this rather than tired ideas he gave like having the gov't "play hardball" to negotiate prices. He seems open to ideas:
There are probably other ways to foster competition and increase efficiency in the medical care system.
Indeed, there is, and it's right in front of your eyes. It's the natural conclusion of your request in the comments for what NYT would call "patient-based medicine".
Jump in the discussion.
No email address required.
Notes -
I think the ultimate US health system would be: Medicaid for those who need it, Medicare for purely palliative care, HSAs as common as 401ks, and insurance that only covers emergencies where the patient is unconscious or at risk of life and limb if a quick decision isn't made. Otherwise full price transparency and an easy way to look up prices for comparable services across all nearby providers.
This is viable for some services, but much of the expense in healthcare is unplanned and transferring between systems is hideously expensive and complicated. If you get hit by a car and end up in the ICU for three weeks and rehab for five months that's as expensive as thousands and thousands of doctor's visits, and price transparency doesn't help a lick. Even if you are awake and say "take me to the cheaper hospital" the ambulance is going to take you to the place you are triaged to, because if you die your family will sue the shit out of them and win.
Furthermore how do you want handle cost overruns. Let's say you get your appendix out and you shop around to whoever reports the lowest price (and it's urgent not emergent so you leave the hospital AMA to go to the cheaper place). Let's say 5k. What do you do when the surgery is a bit more complicated and expensive and the bill is 15k. What do you do when you have a major complication and the price is 1.5 million dollars? People would be furious! And if you want to just average out how much the hospital spent on all of those surgeries...well you've just reinvented general insurance again (since healthy/less complicated people are subsidizing the complicated).
Typically, the solution to these problems is advanced pricing. The hospital examines you and gives you a fixed quote. If there are complications, the hospital is on the hook for them. I've gotten medical services that were effectively not covered by insurance and this worked really well. For a bigger example, take a look at https://surgerycenterok.com/. There's an old but great interview by the founder: https://www.econtalk.org/keith-smith-on-free-market-health-care/.
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This kind of risk distribution seems to be the big question. I'm not sure what the most just way to handle it is, or that it is the same question in every case.
But this isn't a crazy problem that we only run into in medical care. Every contractor in the world is subject to the same problem. Estimates and quotes from any HVAC contractor or excavator takes account of the possibility of cost overruns. The placement of that cost overrun is negotiated in the contract. They offer you an estimate of the cost, and then a clause in there will tell you that it may cost more, or that this price is only certain for X days, or that cost overruns may require progress payments or be split 50/50 or be subject to additional Good Faith Negotiations. Or they just eat the cost when they get the estimate wrong. Or you have a bond on the job completion which will pay out if the job isn't done.
One could easily sell, as part of the price of the procedure, insurance on the procedure itself covering possible bad outcomes. Rather than tying in the price of every medical procedure in the country with the price of every other medical procedure in the country.
These are all solved problems in every field, except medicine.
Including medicine outside the US. Private hospitals in the UK are happy to offer fixed-ish prices for elective surgeries and take most of the financial risk of complications.
ASCs in the U.S. will sometimes do cash pay for low risk things, so it is possible in the US but keep in mind that due to greater access to expensive technology, salary costs (nurses get paid more in the US than doctors do in the UK right?), and lack of rationing mean that the price of care can be much much more expensive.
By a lot.
California alone has more ECMO centers than the entire UK.
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If contractor is redoing my attic and on starting renovations it turns out that my uncle stored there 10kg of U-235, his collection of land mines and 1450kg of asbestos and top secret documents of USA, Ming Empire and Slovenia... Then they can just announce that they stop work, pay penalties stipulated by contract and run away screaming.
The same for say programming contract, if I discover that part of system run on literal punchcards in sealed off bunker then I will likely (depending on contract structure) pay contract penalties and run away or announce that 800h time estimate gets revised to >4800h.
If doctor is doing routine appendix and discovers clot/cancer/other medical emergency equivalent to above they are, I expect, not allowed to run away screaming and pay just modest penalty stipulated by contract and leave patent there.
It's extremely common to abort a surgical procedure because of unexpected complications. And, to scale, a surgeon would face similar liability: modest penalties for damage done, reliance.
This is easily figured out in contract.
Why are y'all so dramatic with your examples?
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I think one of the common problems is that intuitions from other fields die in medicine. Your HVAC contractor fucks up and it costs 2-5 times more. If it's bad somebody goes out of business.
If something has 50x or 100x times cost overruns like idk the F-35 it becomes a national scandal.
In medicine that's just Tuesday.
You have a bad reaction to anesthesia during a routine case, die on the table, they revive you and dump you in the ICU for three weeks before you can think again and then end up in rehab for six months and it's going to cost millions of dollars for what was supposed to be 4.5k.
That's an extreme example but that kind of stuff happens, and lesser versions all the time.
The hospital can't go out of business, society says no. And we can't let you die. Society says no. I'm fine with both of those but they balloon expense.
Except that lots of businesses face similar problems.
Every day trucking companies send out employees onto the highways criss-crossing the country, there are about 150,000 accidents en route, and about 600 of them die each year. That doesn't prevent a broker from being able to give me a quote on the phone in ten minutes as to the expected cost of sending a container to Des Moines. The expected cost doesn't contain the possibility of the truck being wrecked, of the cargo being lost, of the driver getting killed, of the trucking company facing liability from multiple passenger car drivers for damage or injuries or fatalities resulting from the wreck. The cost every time the truck goes on the road could range from a thousand dollars to a hundred thousand dollars.
Plenty of fields are picking up pennies in front of a bulldozer.
If your trucking company goes out of business because they can't eat the loss then another firm will open and fill the economic hole.
We've had issues with hospitals going out of business lately due to COVID and other factors, and nobody replaces them. The patients go elsewhere (sometimes 50 miles elsewhere) and stress another system. It's a slow motion domino effect. The expense and risk is too much and the reward is too low.
Not directly related but we've seen issues with generic meds - generic medication has profit margins that are very thin, so manufacturers just don't make them. Then a drug is missing. That's not good.
That's usually downstream of regulatory oversight making the production cost aggressively high, which I'm not sure I mind (because safety is important), but we do often have shortages of stuff for that reason.
There are many times where they're not allowed to. Or they're prevented from entering the market prior to failure, whereas if they had been allowed, it might have been more robust to individual failures.
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I think this is something that would be covered under "insurance" as I said above. Insurance works for cases where only a fraction of the people who pay into it every year have an event that requires it. Random trauma like car crashes only happen to a small percentage of people every year, and so it's the kind of thing that insurance is good for.
This is the point where someone might be able to shop around and find rehab center with less frills for less money.
This is a choice we are making. We could just as easily dismiss such cases as frivolous and instead have people sue ambulances for taking them to an undesired hospital.
Lots of industries have a way to handle this. One way to handle it is the quote for the service can have the expected price (5k in your example), and then a Not To Exceed amount (15k, or whatever the most likely highest number is), and authorization (from a spouse, someone who will agree to be on the hook for the money) needs to authorize exceeding the NTE. Another way is to just have a single price for the surgery that averages out complications. No, that is not general insurance. Most industries provide services for a set price that allows for some one-off situations and it isn't called insurance.
It's not quite clear to me that we should be spending millions of dollars to save a single person's life. Unless it's really simple/easy to do, in which case why does it cost millions of dollars?
Also, do not discount how much money each person would have in their HSA, if they put as much into it as they pay insurance. Average premium for family coverage is 25k a year. Stash all that away into a HSA, accumulate interest, and there would be lots of ready money for emergencies.
It's a small percentage of total healthcare contact by number of events, but it's a huge percentage of total healthcare spending. Fundamentally seeing your doctor is at most, getting a lawyer consult expensive. The hourly rate could be high but it's reasonably throttled. Being hospitalized is buying a house expensive. It takes a lot of lawyer visits to add up to a house.
Tort reform would dramatically decrease the cost of care without upending all these other apple carts.
This just isn't feasible with how badly things can go. If the "normal" price is 5k but the "Averaged" price is 35k we are absolutely screwing over people who have routine surgery. When stuff gets expensive it can get really, really, really expensive.
Simple and easy is flexible. A lot of problems are managed by forcibly keeping someone alive while their body heals itself. This is what most hospital COVID treatment was. We can provide a short term external heart and lungs and the person's body will fix itself without our intervention then we can turn it off. We can put someone on a ventilator. A vent is "simple" - but it's not cheap.
HSA type situations require real teeth, otherwise people will bet they won't get seriously sick and most of them will be right, but the ones who aren't will fuck the system. One bad episode of sepsis wipes away hundreds of thousands of dollars but is totally survivable.
In the U.S. we spend a lot of time and money keeping people alive we really shouldn't, but we also spent a lot of time and money keeping people alive and it works great but is reasonably expensive. A good amount of these are otherwise young and healthy and economically productive (to say nothing of the ethics). In resource strapped countries these people just die.
You also have things like heroic efforts to keep children alive, many of whom have healthy lives if they make it through whatever acute thing is happening. Might cost a few million to keep the kid alive but their parents will think its worth it and society may actually also.
Why isn't a vent cheap? Do they involve rare minerals?
To be on high flow requires an ICU and constant observation, I guess most of the cost is in personnel?
You can vent someone by hand with a bag, especially if they are sick enough to not require sedation. Horrifyingly we were doing this at times during the pandemic, and we do this all the time acutely to manage emergencies, start anesthesia and so on.
The machines automates the process and doesn't have the attention issues of a really person (or like physical exhaustion).
So yeah a huge chunk of it is personnel - the doctor (who needs to be caring for a smaller number of patients because ICU level care requires much more attention and closer eye), the nurses who need to have very tight patient to nurse ratios. Both of these need to be round the clock including weekends and holidays.
But more personnel are involved than you think - cleaning staff, people to bring up the medication and fluids, dietitians and respiratory therapists to focus in on those sides of things because they are cheaper, than having the doctor do it, unit clerks to manage angry family and paperwork, tons of mostly invisible people.
Everything in an ICU needs to be "safer"/cleaner/whatever because the patients will die at the drop of a hat.
Fundamentally its not like this could be done at 85% instead of 95%-100% for much much much cheaper, but nobody wants to get fined or sued so we spend twice as much money to go from 85-95.
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Awesome. Start doing it.
How does the current system prevent this problem?
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I agree that more transparent price information would improve the market, but that does not yet imply that the market is fit for purpose.
It's a question of market design. Markets have a specific purpose — optimize the allocation and procurement of scarce goods using decentralized decision making, but depending on circumstances, not all of them are effective at this purpose. This topic is closely related to auction theory, where e.g. a second-bid auction is better than pay-as-bid auctions.
The main troubles with market design in health care are:
Due to these issues, a "free market" will lead to perverse incentives; other market designs are better at solving the optimization problem. And yes, market design = regulation.
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This is correct.
I've been reading a book that comments on The Wealth of Nations in the context of the contemporary international economy, with all of the various tariffs and spaghetti regulations. The author makes a recurring drumbeat point that price information must be at the center of any market for it to function as a market at all. Without prices being totally "open source" (for lack of a better term) as well as able to change in a time frame that's short enough to accurately reflect supply, demand and baseline cost, the market will not function as a market is intended.
I do like Noah's characterization that insurers are pretty much paid a small fee to be the fall guys. They have very little control over the market for medicine. Those that do - doctors and patients, also known as producers and consumers - lack that price information component so utterly, that you can't even really call it a market. It's a weird for-profit-not-for-profit-emotion-based "exchange" of services.
My two-cents prescriptions:
Price transparency everywhere. The IT solution already exists to make it trivially easy to see "cost of MRI in USA" instantaneously everywhere.
Invent "Uber for treatment' - you can book a course of treatment at any provider within whatever geography you want. You should be able to book an appointment on your phone in a few seconds.
More doctors. We had a thread earlier this year about the number of doctors in the USA being essentially a cartel operation. Limited residency spots set by the AMA and not updated for 20 years and all that.
More doctor-by-LLM for routine stuff. 50% of "disease" in America is diet, exercise, lifestyle. I'd venture a wild guess that another 10-20% is real but routine stuff; pneumonia, flu, skin stuff, broken bones without life threatening complications etc.
People get to see and own their electronic health records. This feeds into the doctor-by-LLM. In fact, I could see a really awesome scenario in which people could (voluntarily) plug their electronic health records into a service, much like credit monitoring, that is always analyzing your data for deeper problems. And/or offering nudges for better health lifestyle choices.
Pharmacy-by-mail for a lot more stuff. I can see this not being allowed for drugs that can have really bad interactions with other stuff, or painkillers because *gestures to opioid crisis*
Break down state-by-state insurance fences. People aren't magically more or less healthy in Colorado, Minnesota, Georgia, or Maine.
Auto insurance considers your make and model and year. Medical insurance should do the same. Check-ups (for insurance purposes) annually. No survey or self-reporting. Height, weight, blood work, treadmill or other cardio fitness measurement. If you can't run, walk. If you can't walk (and aren't a paraplegic etc.) stand for as long as you can, or shuffle. Whatever. These reports go back to the insurance machine learning model to give you a quote. You pay it or you don't. If you can't afford insurance, you still know the price of the procedure down the road (see point 1)
30-50 percent of healthcare spending is hospital based (therefore minimal choice) and a good portion of the population is severely limited in terms of choice by geography. Furthermore people would instantly be pissed when the posted price is not what the bill says, which would be extremely common since a lot of crap goes into caring for a patient and we don't know in advance what we are going to see.
How would this work? You can schedule with whoever you want now, but that doesn't mean they have any spots for you any time soon, it doesn't mean they take your insurance, it doesn't mean they are the correct type of doctor for you. You see things like entitled people with basic hypertension demanding to see a cardiologist for management and then burning up all the spot that cardiologist had for actually complicated cases that require cardiologist expertise. Patient's will also lie about it because they insist they need the "best care." Some healthcare systems and providers have online booking resources already, but again wait lists, and how are you planning on making doctors take everybody regardless of insurance? If you try and mandate government insurance you'll see entire specialties like Psychiatry just choose to go to cash only. OB would die as a specialty without tort reform.
This comes up all the time here and is still incorrect. Federal residency spot funding was supposedly frozen decades ago, but state and hospital specific funding has been expanding spots for years. The AMA doesn't really bother with supply restriction, their primary lobbying aims at present are actually woke bullshit and expansion of supply (in the form of midlevels). I've been banging my drum in an attempt to correct this inaccuracy for years but it doesn't seem to stick.
Generally you don't pay the doctor to manage routine disease, you pay the doctor to manage complicated disease yes but also to know what is routine vs. complicated. Ruling out things that look very close to other things is what the training is for and something that midlevel and other non physician staff constantly fuck up. People would be furious if their family member died a preventable death because of something that is an atypical presentation or a common mimic. Physician work also involves a side helping of preventing people from hurting themselves. This includes the obvious like suicidal ideation but also things like people pursuing risky treatments, not understanding "yes the bad outcome could happen to you" and so on. Algorithmic support is not good at managing these tensions.
Much of this is actually already available now in one form or the other, although with room for improvement. Your hospital has access to your outside records unless either hospital involved makes a choice not to (well more or less). Algorithmic support tools are under investigation current but are mostly pretty poor for now.
Depending on your insurance company they are already doing this now and they like it a lot. The why for them is a complicated interplay between insurance companies, big Pharma, and retail pharmacies. It's more convenient for patients but is seeming to end up not actually being any cheaper. It also seems to result in an increase in intentional and accidentally overdoses, drug interactions resulting in morbidity and mortality, and a decline in retail pharmacies (especially independent ones).
Meh, no dog in this fight. Although it is worth noting that some states are healthier than others (chiefly obesity rates) and care is more expensive in some places for a variety of reasons.
Some insurance companies offer rebates to do this now and then will do things like sell your health data to third parties, and use nudges to say and avoid your prediabtes from becoming actually diabetes. If you very heavily peg insurance prices to health status then you'll rapidly price anyone with chronic disease out of the market. If only the healthy can get health insurance it rapidly becomes useless.
Thank you for the high effort response. Upvote upvote'd.
I won't respond line for line because, frankly, you've made me think about multiple points and I haven't come up with a conclusion yet. So...thank you!
I find a good rule of thumb when it comes to anything is "if easy answers were to be had, someone would have done them." This definitely fucks me at times. I said no to Bitcoin in 2010. Many of my friends did not.
However usually most of the time the low hanging fruit is gone before we get there.
This is particularly important to healthcare - so much money is involved that you better believe that a ton of people have tried to get in and make some money or fix some problems. They almost always end up like Theranos. Google, Apple, Amazon, Microsoft, a shit ton of PE. At best most of them manage to come in and make a ruckus before the regulatory environment kicks them out for taking advantage.
Healthcare in general is weird and American healthcare in particular is uniquely weird. There's a lot of confusion, myths, lies, and well intentioned people trying to fix a complicated problem. Sometimes it more or less makes things worse (see: the ACA) but that doesn't mean it's not well intentioned.
If you have a specific line item you want to dig into have it, it's entirely possible that I'm wrong about something or was right about it 20 years ago and the situation has changed.
Beyond healthcare, I firmly believe the ACA is a major reason for dampened growth. For most companies - and all without outside funding - it's not possible to start paying the Healthcare tax once you hit 50 employees. The only way to scale now is to have a VC or PE firm pay your employees costs for you.
The ACA is a complicated mess, I've heard to described in a million ways but probably my fav was "a poison pill that came with an antidote...but we didn't take the antidote.
Some of the stuff was expensive but ultimately the right call (like removing lifetime limits). Some of the stuff was expensive but actually likely efficient in the long run (forcing everyone to get EMRs/EHRs).
Yeah Epic made a ton of money along the way but its improved the doctor and patient experience (although the former don't always feel that way) and simplified billing greatly.
....but it was hugely expensive. And any time someone throws regulation in on healthcare it has a whole bunch of unforeseen side effects (and foreseen and lobbied for and abused side effects). Not that other regulation is too much better.
One thing we've seen from this stuff is the death of private practice - private practices are more nimble efficient, provide care more cheaply* and are more likely to do things like charity care, down billing and all kinds of other prosocial nonsense. Basically anything you hate about healthcare is probably something your doctor is forced to do because they are an employee.
Physicians were also banned from owning hospitals relatively recently, this was for a good reason - they were abusing that power in kickback schemes and other nonsense. However the replacement is business people, they are shit ton worse because they don't understand healthcare at all and can't make good decisions, and are just as interested in kickback schemes and so on but are much better at them because they are good at business.
Both of the above were massive own goals which probably made things significantly more expensive and didn't deliver the gains they were supposed to.
*granted some of the cheapness is generated by the environment allowing them to exist.
Edit: I thought I remembered the funding for EHRs coming from the ACA but fact checking myself I'm less sure.
Good fact check! EHR funding was a part of the ARRA, aka the Stimulus.
Hmm I could have sworn there was something about meaningful use carrot/stick being smuggled into the ACA but I'm not spending time hunting that down haha.
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Wait, seriously? (goes to look it up...)
Yup, it's now illegal to offer to sell anybody insurance unless you have infinity dollars.
At this point we should just ban insurance plans that don't provide sips from the Holy Grail. The damned insurance execs may say they haven't yet found the Canyon of the Crescent Moon, but they also said they only had finite money; ultimately I think it's the right call.
[Edit: I'm trying to grouse about utopian laws vs unintended consequences, but on reread I see this comes off as snarky towards you too, and you're the best contributor in the discussion here, so I apologize and I'll shut my sarcastic ass up.]
It can be pretty easy to go over lifetime limits - if you are a sick kid you burn through all of your insurance you can ever get by age 8, and what...nothing after that? Not even if you stay healthy for 60 years?
Certainly you can consider rationing for some things, but if you do all the right stuff, have good genetics, stay healthy, you can still get hit by a car and then be unable to get any care ever again?
This is magnified by the way that charges are inflated as part of the dance of getting insurance reimbursement since those numbers are basically made up and have minimal relationship with actually cost.
Something that costs 1 dollar might be billed as 30 dollars so the insurance pays 1 dollar five cents. But if they can they'll charge 30 dollars against your lifetime limit.
Rationing is exceedingly unpopular and hard to implement in a way which doesn't immediately run afoul of some angry interest group, and all it takes is one photogenic person who would have survived or not gone bankrupt...
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Why? Genuine question.
Did ACA regulations make it impossible to run a private practice?
The short version is that it's the same thing happening elsewhere in the economy - economies of scale, regulatory burden, lobbying efforts. All these things kill small businesses.
Some examples in healthcare include the usual assaults on small business, the decline of competent secretarial staff (women have careers now! That's good but... (and doctors have stopped marrying people who can be there office manager for the most part)), requirements to have EHRs (easy for a big health system to implement and buy but not an individual practice), increased documentation requirements, and so on.
In the last few years private equity firms have come in and bought out many of the remaining private practices and physician groups. The owners are getting older and ready to retire so they sell it to PE, and that is one of the few ways to be profitable in healthcare (siphoning off physician pay).
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